The Euro rally of late continued this morning compounding the significant gains against Sterling which now stand at over 4 c in the last 9 days
Why is this? Well as has been discussed here on Euro Rate Forecast, the debt fears surrounding the Eurozone has been the weight dragging down the value of the Euro. We have shown how these fears have perhaps been overplayed by the market. Certainly when seen in the light of the good results we saw in the early probes of European Bank strength last week.
The more significant European Bank Stress Tests are later this month and it appears the market is factoring in a positive result here to.
The IMF today raised it’s predictions for global growth from 4.2% to 4.6%. In the report they highlighted how European debt could however hinder the recovery. I would normally have expected this to weaken the euro but it seems the fears are now factored into the market. And let’s not forget the mire of the UK economy too. We are still a long way from seeing the full effects of the budget and there is a threat now of strike action by the public sector.
There is still a real possibility of Sterling gains on the Euro Pound exchange rate, but this may not occur for sometime. UK GDP figures due Monday could be a mover, but bearing in mind the debt fears are currently not worrying markets so much, it will take some fairly important news to give the Pound a boost against the Euro short term.
To find out more about the Euro rate forecast against Pound Sterling, please fill in the contact form and an experienced trader from this blog will be able to discuss how we may be able to maximise your transfer.